Contractionary fiscal policy, other things being equal, will tend to:
a. increase interest rates.
b. increase investment

Which of the following policies could the Fed use to lower the interest rate?

a. A tax cut. b. Selling government securities. c. Raising the discount rate. d. Reducing the required reserve ratio.

Suppose the price of a product is less than its average variable cost. When the firm's fixed obligations are completely ended, it will now most likely

a. make an economic profit b. go out of business c. expand to a bigger operation d. continue to be shut down e. break even